GOP Senators to Administration: No Union Carveouts from Obamacare

Send letter opposing any regulation to give unions a break from Obamacare fee without giving the same to employers, charities, and faith-based organizations

WASHINGTON - Senators Orrin Hatch (R-Utah), Lamar Alexander (R-Tenn.), John Thune (R-S.D.) and 18 of their Republican colleagues today urged the Obama administration against moving forward with a proposed regulation that would exempt unions from an Obamacare fee that applies equally to employers, charities, and faith-based organizations.

The Centers for Medicare and Medicaid Services (CMS) published a regulation on October 30, 2013, stating that the agency intends to propose further rulemaking which would aim to exempt certain Taft-Hartley union health plans from the reinsurance fee mandated by the Patient Protection and Affordable Care Act (PPACA).

In a letter to Sylvia Burwell, director of the Office of Management and Budget, the senators write: “The [reinsurance] fee is undeniably expensive for unions, employers, charities and faith-based organizations whose health plans are not available in the new health insurance exchanges and will not see any of those dollars returned to them. For the year 2014, the fee is $63 per covered life—a multi-million dollar levy for larger organizations.”

They continue: “The regulation makes no justification as to why union members should be exempted from this fee while other similarly situated organizations (and, ultimately, their beneficiaries) must continue to pay it.

“It has been widely reported that labor unions recently sought an exemption from the reinsurance fee through Congress but were rightly rebuffed. To think that the Obama Administration would consider such an action that benefits one group over another can only be characterized as cronyism at its worst.

“Self-insured health insurance plans—whether or not they also self-administer—are all facing the same dilemma of being forced to subsidize insurance companies participating in the new exchange. The regulatory process is meant to implement the law as written, not as the Administration wishes it were. If the law will unfairly hurt certain groups, it should be repealed or amended through Congress.

Hatch is the senior Republican on the Senate Finance Committee, Alexander is the senior Republican on the Senate Health, Education, Labor and Pensions committee, and Thune is the senior Republican on the Senate Commerce, Science and Transportation Committee. Together, those committees have key oversight roles concerning our nation’s health care system.